However, they have already encountered a snag, with a New Zealand court ruling in June that search warrants used in the raid were illegal.

Now Key has asked the government's Intelligence and Security division to investigate "circumstances of unlawful interception of communications of certain individuals by the Government Communications Security Bureau", his office said in a statement on Monday.

TVNZ cited a memorandum filed in the High Court as saying that the bureau used illegal methods to locate individuals who were then issued with arrest warrants.

Key, meantime, expressed disappointment at the suggestion that any part of the investigation into Dotcom was carried out illegally.

"I expect our intelligence agencies to operate always within the law. Their operations depend on public trust," he said, TVNZ reported.

"I look forward to the Inspector-General's inquiry getting to the heart of what took place and what can be done about it."